Ag industry holds steady despite lower row crop values

STARKVILLE, Miss. -- Agriculture was a $7.7 billion industry in Mississippi this year, exceeding the total set in 2017 despite declines in the estimated value of row crops, timber, catfish and livestock.

The state's largest agricultural commodity, poultry, is responsible for pushing the overall value above $7.5 billion for the second straight year, bringing in nearly $3 billion by itself.

"The strong poultry numbers made up for some lower production values in other commodities," said Josh Maples, an agricultural economist with the Mississippi State University Extension Service. "Poultry prices have been lower in recent months, but prices during the first half of 2018 were much higher than during the first half of 2017, and egg prices have been significantly higher than last year.

“In total, poultry value is up 8 percent, or $230 million. That more than offsets the decreases in other commodities,” he said.

Forestry was a $1.25 billion industry, a 3 percent dip from 2017 values.

“Across the board, all timber products are doing better in south Mississippi than in north Mississippi due to more mills and competition,” said John Auel, assistant Extension professor of forestry at MSU. “The economy is doing well, but other factors are keeping housing starts down. Millennials are not buying houses like previous generations did.”

Included in the overall $7.7 billion total is an estimated $352 million in government payments -- the largest amount of federal assistance Mississippi producers have seen since 2009. These payments include protection against price and revenue declines.

One type of the assistance was for growers affected by a trade standoff between the U.S. and China. This summer, China enacted tariffs on a long list of U.S. goods, including soybeans, corn, cotton, rice and wheat, in response to the U.S. ordering tariffs on imports from China.

“This trade war is not about agriculture. It’s about patent protection and trade of other goods,” said Keith Coble, professor and head of the MSU Department of Agricultural Economics. “Any country in trade negotiations knows that when you get hit, you have to hit back where you can hurt the other country the worst. In our case, we send a lot of ag products to China, and they knew hitting us there would put the greatest pressure on us.”

The gap between the values of soybeans and cotton, the state’s third and fourth largest agricultural commodities, closed by more than $138 million this year. Soybean values fell more than 5 percent from $1.12 billion in 2017 to $1.05 billion despite growers planting 10,000 more acres of the crop. One major factor in the lower prices was the Chinese tariffs.

Cotton, meanwhile, rose 14 percent to $623 million from $548 million in 2017.

The only other row crop that saw a value increase was rice, which jumped almost 13 percent to $117 million, compared with $104 million last year. Rice finished ninth out of 16 commodities.

“We’ve just got lower commodity prices almost across the board. Producer margins are really tight in all of agriculture,” Maples said. “Typically, you have some options. If corn and soybeans aren’t doing well, you might jump to cotton. Producers have done some of that, but it’s not as if cotton prices are really high. They’re just not as low as corn and soybeans have been.”

Corn rounded out the top five, with a $351 million production value, up 4 percent.

The livestock industry was worth $422 million this year, a 1.3 percent decrease. With an estimated value of $305 million, beef cattle are up 7 percent and finished sixth, while milk production was down 11.4 percent at $22.9 million and finished 13th. Hogs finished one spot ahead of milk production with $94.3 million, a 19.7 percent dip from 2017.

“We’ve got large supplies of every livestock and poultry product,” Maples said. “We’re having to work through those supplies, and we’ll have the largest amount of pork, poultry and beef production we’ve ever seen in 2019 once you put them all together.”

Catfish finished seventh with a value of just over $164 million, a decrease of more than 9 percent from nearly $181 million in 2017.

Finishing eighth, sweet potato production had a value of nearly $118 million, a decrease of less than 1 percent from 2017. Specialty crops held steady at No. 11 with $104 million.

Peanuts, wheat and grain sorghum rounded out the last three spots. Peanuts were valued at $18.7 million, wheat at $12.1 million and grain sorghum at $1.3 million.

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